Game Plan: The Great Market Debate of 2008
The bears and the bulls are at it again, arguing over the best way to interpret this market. Cramer, though, is taking the high road. The same sectors he’s been recommending all along work no matter who wins the debate.
The bulls point to better-than-expected retail sales, the strength of transports, the conclusion of the Clear Channel deal and homebuilder stocks that refuse to go down.
Companies like Toll Brothers are finally seeing their inventories thin out. Naples, once one of the worst real estate markets in the U.S., is seeing price stabilization. The PHLX Housing Sector Index is holding steady no matter how bad the earnings are from the industry’s biggest names.
Clearly, some conclusions can be drawn here, as all these factors point to a possible bottom. But the bears are placing equal or even more weight on the unemployment numbers and the fact that we're seeing the lowest consumer confidence in 28 years.
Who’s right? For an answer, investors want to watch Lowe’s and Home Depot’s earnings reports next week, Cramer said. As retail outlets for all things home related, good numbers here could indicate that this bottom is real.
In the end, though, Cramer’s not making a prediction. He’s just sticking to the themes that work no matter what right now: international infrastructure, oil, gas and alternatives like wind, agriculture, minerals and mining and defense. You’ve heard him recommend these stocks before: Transocean, National Oilwell Varco, Agrium, Vale, Apache, Foster Wheeler and Raytheon.
For those of you who absolutely need an answer, think of it this way: Just the fact that we’re debating the potential for a bottom is a good thing, Cramer said. That alone is making things in the market better.
Jim’s charitable owns Foster Wheeler, National Oilwell Varco and Raytheon.
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